Sorry. I was a bit drunk last night. I won't use the internet like that in future.
In the meantime, you could just up the number of CALs in the control panel section.
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Hopefully the event log errors will go away with it.
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They should do, yes.
The security problem might not be so bad if you're hosting an internal website, and there are tight controls on the client machines, but if for example someone works this out it could go horribly wrong. Personally I would avoid IIS altogether, but there are features that can be handy in certain environments, also some companies have policies that say you have to use MS.

Apache runs great on Windows BTW, if you do want to switch. Linux makes a great webserver platform, but it isn't neccesarily possible depending on the company involved and their rules about that sort of thing.
I repeat, I'm sorry about that first post. It wasn't very helpful.